How Often Can You Refinance Student Loans?

You can refinance as many times as you like, but you should only do so after you’ve raised your credit score or interest rates fall.

Many borrowers refinance private or federal student loans once. But there’s no limit on how often you can refinance student loan debt.

Refinancing multiple times makes sense if you’ve raised your credit score and paid down credit card bills and personal loans or if private lenders have decreased their refinancing rates.

Many refinancing lenders don’t add origination fees or other costs. And student loans don’t have prepayment fees. So the only harm in refinancing may be the temporary hit to your credit score. But that damage can be mitigated.

Keep reading to learn why it makes sense to refinance student loans more than once and how to protect your score if you do.

You can refinance some or all of your existing federal or private student loans and combine them into a new loan with a private lender. Refinancing makes sense — especially for private loans — if you can get a lower interest rate or drop a cosigner from your current loans.

Keep in mind that refinancing federal student loans is risky. You’ll lose all the protections that come with them, including access to income-driven repayment plans and student loan forgiveness programs, like the Public Service Loan Forgiveness Program.

But if you don’t plan on taking advantage of those options and you want to pay off your student loan debt as quickly as possible, refinancing may be a good option.

You should look to refinance a second time to get a better rate. To qualify for the best rates and terms, you’ll need an excellent credit score, good income, and a low debt-to-income ratio. Read more about how student loan refinance affects credit.

A lower rate will save you money over time by decreasing the interest you’ll pay over the life of the loan. And if you need to free more room in your budget, refinancing can lower monthly payments if you choose a longer repayment term. Your loan terms will allow you to make extra payments towards the balance without being charged prepayment penalties.

Learn More: Student Loan Refinancing Calculator

You can refinance your loans with your current lender. It may offer refi options that let you switch from a variable rate loan to a fixed-rate loan or vice versa or get a cosigner release.

You can also choose to move your loans to a new company. The benefit of refinancing with a different lender — aside from getting a lower rate — is qualifying for a cash bonus. Many lenders, like Earnest, offer these types of perks to entice new customers with good credit and a history of making on-time payments to refinance.

Learn More: The Best Student Loan Refinancing Bonuses 2022

It’s not wrong to refinance student loans that you’ve previously refinanced — especially if your financial situation has improved. Doing so can save you money over the life of your loan and make your monthly payments more manageable.

Use an online marketplace like credible.com to find the lowest rates and best repayment terms without submitting applications to multiple banks and credit unions.

The main downside to refinancing is the tiny hit to your credit score when you submit a full application to a lender. Once you do that, the lender’s underwriting team will do a hard credit check before approving your loan. Too many hard inquiries can drop your score.

You can still shop around, but it’s best to limit your shopping to a short window — no more than 45 days, depending on the credit scoring algorithm the lender uses.

Learn More: How Does Refinancing Hurt Your Credit?

Before refinancing your student loans again, follow these steps to get the best rates and protect your credit in the process.

Review your credit history. Before applying for a new refinance loan, review your credit report with the major bureaus. Check to ensure there aren’t any missed student loan payments or other negative marks that could lower your score.

Review your current monthly expenses. Pay down your credit cards and other education loans, and hold off on financing a mortgage or auto loan until after you’ve refinanced. Lowering your credit utilization and limiting hard inquiries of your credit file should increase your creditworthiness.

Get offers from multiple lenders. Consider applying with more than one lender at a time. You may be able to use an offer from one lender to leverage a better offer with another.

Read the promissory note. Review the contract to understand your repayment options, including when you can temporarily pause payments with deferment or forbearance. If you choose a refinancing loan with a variable interest rate, make sure you understand when the rate will increase. You’ll also want to see if you can get a rate discount for enrolling in autopay and paying on time for several months.

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